Anne and Matt February 2013 Net Worth

In the series Naked With Cash, seven Consumerism Commentary readers share their financial progress on a monthly basis. They are joined by Certified Financial Planners who provide feedback on their journey. Read this introduction to learn more about the series.

Anne and Matt are twenty-seven years old, living in the Midwest, with two children. Read their bio here for background about their financial situation. Anne and Matt are on Team Neal, with Certified Financial Planner Neal Frankle. Review their January update for last month’s progress.

Their goals are to strike a balance between putting aside money for the future and enjoying the present and to save enough for retirement. Keep reading to see their net worth report, comments about the report and their progress, and thoughts from Neal Frankle.

Anne’s comments and analysis

This was a solid month for our family. No unexpected expenses or surprises. Matt got a cost-of-living raise this month: an extra $2 per hour hour for his billable hourly bonus. This will translate to an extra $4,000 to $5,000 gross per year, depending on the number of hours he bills.

He also got a $500 per month benefit stipend. He’ll get it in his paycheck until the 401(k) begins, and then the money can go toward a match. Or, if they finally add a group health insurance policy, the money could go toward that. Once benefits roll out, the $500 will go away and be replaced with those benefits.

For now, we’re putting that $500 aside to fund Matt’s health savings account. I thought the 401(k) was going to start on March 1, but that didn’t happen. Hopefully soon.

March ought to be a good month. Hopefully, we’ll get our tax refund, which should be around $3,800 combined for federal and state. Also, this is a three-paycheck month so the incoming cash will be more than usual.

We’ll fund the IRAs and 529s on schedule (one-twelfth of our yearly goal), and put the rest of the extra cash toward our current savings goals:

Contribute to the HSA.

Save a chunk of cash for our next vehicle in five to ten years, or to pay for a major repair.

Savings for home improvements.

Neal and Jacob have encouraged me to use some kind of program to track our spending. I’ve used Mint in the past, but I didn’t stick with it. I know that budgeting is the “right thing to do” or something, but oh man. I just am dragging my feet on this.

But ya know what? Jacob you just heart budgets so much, that it makes me smile a little. Your enthusiasm is fun. So, while writing this update, I downloaded You Need a Budget for their free one-month trial and I’m going to give it an honest go. I was also considering Quicken, but I like the idea of a free trial first. I suspect I’d like Quicken better for automatically pulling in my data and having expanded capabilities, but we’ll see how this goes.

I hope I’m pleasantly surprised, and that it actually is a benefit to track spending like this.

Jacob mentioned budgeting a month ahead of time. We did that back when Matt was paid once per month, and that worked well. I think we can try doing it again. Matt’s base salary comes in regularly every two weeks, and his bonus is usually every two weeks as well, but sometimes there’s a delay. It depends on when his boss processes it. I was considering perhaps keeping all of our expenses, discretionary spending and some savings to the salaried checks, and devoting the bonus solely for investing and special savings. Same for the extra TWO checks per year — all of that can go toward savings goals.

Thanks for the encouragement and accountability to improve.

Feedback from Neal Frankle, CFP

Congratulations on another solid month. The $2 hourly increase and the benefit stipend are really going to go a long way. And it sounds like you’ve done a great job thinking through the best way to use that extra cash. I like your approach.

Also, I like your plans for the tax refund and three-paycheck month. Nice work. Also, you are smart and to be congratulated to be thinking of pre-funding your next car purchase. I wish more people would think about it this way.

Since budgeting is really so important, I’m really pleased that you are going to try You Need a Budget. I think you’ll love it if you stick with it – and I hope you do. The latest version has a very cool reconciliation function which has been a game changer for me.

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Looks like the year is starting off very well for you. I don’t see a single thing that would indicate that your money management decisions are off-track. As for the budget thing, I track everything and budget for a full year at a time. There’s a part of me that insist on a “gots-ta-know” philosophy and I’ve never been able to get over it. I realize that being retired adds stability to spending that can’t be achieved when you’ve got kids and a lot of changes going on and I applaud you’re efforts. I’ll say a few prayers in hopes of speeding up that Health Insurance coverage from Matt’s employer – it would make a huge difference in your lives.

Thank you for your prayers! :) I am not loving our health insurance situation at all. Once I’m off COBRA later this year, maybe my private policy will be decent. I’m not sure what 2014 will bring with health care reform…it could get ugly for us. I don’t think we’ll qualify for any tax breaks.

The Naked With Cash thing is pretty neat. It’s interesting to see the different scenarios of real people.

Since they are trial-ing YNAB and considering Quicken, I thought I’d mention my opinion that YNAB is WAY better than Quicken for budgeting. I first installed Quicken from a 3.5″ disc onto my 20MB Hard Drive DOS machine (ie a long freakin time ago) and used it and it’s upgrades for over 2 decades. So I was a ‘lifer’ for Quicken and recommended it to everyone. It was unbeatable for tracking what I had already spent. .. When I decided I wanted to use it for future budgeting it totally sucked. It was overly complicated and didn’t work the way I wanted to use it. I did the YNAB trial and reluctantly dropped something like $65 for the license. YNAB is expensive. Maybe a bit too expensive in my opinion but it sure does work good. YNAB is very, very good for creating, maintaining, and understanding your budget.

I have absolutely no association with YNAB and they never gave me anything. I sometimes think Quicken owes me a pension or maybe something for pain and suffering.

I really appreciate this. So far, I haven’t loved YNAB, but I think part of my problem was at the beginning of March, I didn’t have enough cash in my checking account to cover the entire month’s budget. So I was really confused, ya know?

I have April’s money earmarked in a savings account now, so in theory it should be easier to create something.

Also, I feel like my YNAB budget isn’t totally accurate. I wish it was linked to my banks so I could have that assurance.

I like Mint for budgeting. Downloading transactions to follow along is a must have for me. Mint has suggestions for how much to set your budget at based on your previous spending. This was great when i first started using the budget feature.

I’m also tinkering with Mint again. I do like the automatic transaction updates and the budgeting feature. Plus ya know, free. (Though I do know they are getting tons of marketing info from me via my purchases and banking).

I’ll chime in again on this. Those are some excellent considerations mentioned above for Mint vs YNAB.

I like YNAB because I actually kinda enjoy entering every line item. Weird I know! It forces you save your receipts and revisit your expenses later as you enter them. That’s a great side effect of not being able to simply import your transactions. However I realize many people don’t want a second job doing data entry of their own receipts, and and they probably have better things to do with their lives!

YNAB is pretty open about what developments they are working on (by sending emails to registered users) and I haven’t seen anything about importing transactions being available anytime soon. I don’t know for sure though.

So if you don’t think you’ll want to manually enter your data forever, don’t spend a bunch of money on YNAB!

Actually you can import transactions from your bank now, but you have to manually download the file, upload it and sync it. I think that capability came out with their latest version but I don’t know when it was released.

I’ve been using YNAB for the last couple months and I LOVE it. The only time it’s frustrating is if I slack and have more than a few days to put in at once, but as long as you keep up with it regularly I think you will find it really helpful.

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About Luke Landes

Luke Landes founded Consumerism Commentary in 2003 and has been building online communities since 1990. Luke has contributed to PC World Magazine, US News, Forbes, and other publications. Read more about Luke and about Consumerism Commentary.

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